Beware: Every four hours, one Indian banker gets caught for fraud

An analysis of data compiled by the Reserve Bank of India (RBI) has revealed that on an average, at least one in India is caught and punished for fraud every four hours.

The study revealed that between 1st January 2015 and 31st March 2017, as many as 5,200 officials of public sector banks had been punished for fraud.

Here’s more.

Rs. 66,066 crore has been lost to fraud

The RBI document said that from 2012-13 to 2016-17 (up to the December quarter), there had been a total of 17,504 cases of fraud across 76 banks in India and a total of Rs. 66,066cr had been lost.

SBI tops the list with most cases of fraud

In the period between 1st January 2015 and 31st March 2017, 1,538 State Bank of India (SBI) employees got punished for fraud, putting SBI at the top of the list.

In the same period, Indian Overseas Bank and Central Bank of India came second and third with 449 and 406 cases of punishment for fraud.

PNB was fifth with 184 convicted employees.

Fraud trendsAmounts lost in fraud has gone up in India

The RBI document also revealed that bank fraud cases, including private banks, had declined of late, but amounts lost in fraud has increased.

Fraud cases declined from 4,305 cases in 2013-2014 to 3,870 cases in 2016-2017 after increasingly marginally in 2014-15 and 2015-16.

However, amounts lost in fraud have gone up, from Rs. 10,170cr in 2013-14 to Rs. 17,750cr in 2016.17.

12% of total fraud cases saw bank staff involvement

According to the RBI document, of the total 17,504 cases of fraud between 2012-13 and 2016-17, 2,084 cases had seen the involvement of bank staff – almost 12% of total cases. The data, however, didn’t reveal how much money had been lost in these cases.

What experts have to say on bank frauds in India

Bikash Gangadharan, a senior manager with a multinational bank, said that the hierarchical Indian banking system needs multiple levels of authentication to reduce fraud.

Tobby Simon of Synergia Foundation, a multi-disciplinary think tank, said that the top management is at fault for not having algorithm-based risk reporting frameworks to pinpoint frauds.

Service providers like IBM have reportedly also developed software which flags frauds.